Stock investing is a year-round activity, as investors constantly look for income opportunities. But among all seasons, summer could be the best time of the year to invest in a growth stock. The mood is upbeat, and you can derive substantial gains while frolicking in the sun.
Investors seeking a windfall this summer should consider the summer sizzlers Cervus Equipment (TSX:CERV), Corby Spirit & Wine (TSX:CSW.A), and Magna International (TSX:MG)(NYSE:MGA). The stocks are flying high and could fly even higher going into the second half of the year.
Agriculture stock with strong upside
Calgary-based Cervus Equipment is a well-known stock on the TSX. The stock was a high flyer last year but has since dropped and moved sideways since the start of June this year. However, signs of a rally are looming, and the price could surpass the 52-week high of $14.85 in the coming months.
The negative returns in the first half of 2019 could be a thing of the past. Investors are beginning to take a serious look at the company’s profitability. Last year, the farm and construction equipment company delivered the highest profit in four years. Net income jumped 33.5% from $19.9 million to $26.6 million.
Clearly, the tailwinds are blowing. The dividend yield of 2.2% is hard to pass up for a stock that’s currently selling at only $12.08. Cervus Energy’s five-year average dividend yield is 3.69%. With income growing and more funds available to share, the company could raise dividends in the near future.
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Wines and spirits will rule in summer
Summer won’t be fun without the wine and spirit products. Market leader Corby Spirit and Wine has a strong association with Pernod Ricard S.A., which is a global leader in the spirit and wine industry. You can expect brisk sales this summer for the $503.8 million company.
Income investors have always kept the stock on their radars, because it’s one of the highest dividend payers. Corby’s five-year average dividend yield is 4.11%. The momentum could start to build this summer and extend beyond the season. Investors could feel the Christmas spirit early once the stock starts to sizzle.
The price of $16.85 is considerably cheap for a company that has, over the last three years, maintained a $25 million net income. However, there is plenty of room for growth.
A strong catalyst for summer
Magna International was already preparing to supply the lucrative Chinese market after forging a deal with Beijing Electric Vehicle Co. But the escalating trade tensions between the U.S. and China could jeopardize the deal and push it to the back burner.
However, a fresh new hope emerged this week. The top trade negotiators from the U.S. and China are resuming talks, as confirmed by media reports. It was reported that U.S. trade representative Robert Lighthizer and treasury secretary Steven Mnuchin spoke with China’s vice-premier Liu to discuss trade.
The positive news could drive the shares of Magna International higher this summer. Investors would get a bonus too from the 2% dividend yield. Fun time has arrived for the maker of the next generation of electric vehicles.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Christopher Liew has no position in any of the stocks mentioned.